Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (November 2022)
30 slides from Federal Signal's investor presentation, November 2022
Slide 1: Disciplined Growth
Disciplined Growth Investor Presentation November 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains unaudited financial information and forward-looking statements. Statements that are not historical are forward-looking statements and may contain words such as “may”, “will” ,“believe”, “expect”, “anticipate”, “intend”, “plan”, “project”, “estimate”,
Slide 3: Federal Signal at a Glance
Federal Signal at a Glance • Founded in 1901, joined NYSE in 1969 (“FSS”) • Diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets such as street sweepers, sewer cleaners, vacuum/hydro-excavators (“safe- digging trucks”), industrial vacuum loaders, wat
Slide 4: Why Federal Signal?
Why Federal Signal? Composition of Businesses • Clearly-defined strategy, with two groups – ESG and SSG – each of which have strong growth potential through a combination of organic initiatives and M&A End Market Exposures • Typical annual revenue mix of ~50% publicly-funded / ~50% industrial • Publ
Slide 5: Two Attractive Platforms
Segment Two Attractive Platforms Environmental Solutions $1.11 B* Safety and Security Systems Group (ESG) Group (SSG) Serves publicly-funded, Serves the needs of Markets industrial, and utility markets for municipalities and industrial surface and sub-surface cleaning, verticals for audible and visu
Slide 6: Environmental Solutions Group (ESG)
Environmental Solutions Group (ESG) Have established a platform serving maintenance and infrastructure markets to provide customers with a comprehensive suite of products and services Street Sewer Safe Industrial Road Materials Hauling Metal Extraction Application sweeping cleaning digging cleaning
Slide 7: Safety and Security Systems Group (SSG)
Safety and Security Systems Group (SSG) Serves the needs of government and industrial verticals for audible and visual safety and security notification devices Public Safety and Security Signaling Systems Lights and siren products for Police, Fire and Audible and visual Warning Systems Application H
Slide 8: Macro Factors Driving Demand
Macro Factors Driving Demand Federal Signal’s diverse portfolio of specialty vehicles is well-positioned to Proposed Infrastructure Spending Allocation Plan . capitalize on favorable macro trends across its core end markets Infrastructure Bill • $550 billion of government spending over five years to
Slide 9: Macro Factors Driving Demand
Macro Factors Driving Demand Additional macro trends driving opportunity for Federal Signal’s U.S. Housing Starts diverse portfolio of products and equipment U.S. Housing - A Mountain To Climb • As of December 2021, the number of single-family housing units still under construction increased to the
Slide 10: Key Strategic Initiatives
Key Strategic Initiatives Specialty Vehicles for Areas of Aftermarket Parts and Audible and Visual Focus Safe Digging Diverse Services Warning Devices End-Markets Supported By Flexible New Product Technology as an Manufacturing & “ETI” Disciplined M&A Development Enabler Culture 10
Slide 11: Strategic Initiative– Safe Digging
Strategic Initiative– Safe Digging Federal Signal is well positioned to establish a leading position in an emerging application for vacuum-excavation technology; increased regulation expected to accelerate growth What is it? Why is it Attractive? Why Federal Signal? • Vacuum excavation or “Safe Digg
Slide 12: Acquisition of TowHaul Corporation
Acquisition of TowHaul Corporation Product portfolio includes a comprehensive range of specialty trailers and vehicles that support the extraction of metals, with robust aftermarket business Lowboy Trailer Multi-Purpose Gooseneck Water Tank Carrier Dragline Bucket Road Conditioning Truck Parts Trans
Slide 13: Financial Overview
Financial Overview Net Sales Adjusted EBITDA Margin* Q3 2022 Highlights2: 1,345 (Consolidated) • Net sales of $346M, up $48M, or 1,090 1,221 1,131 1,213 234 16%, with organic growth of $27M, 899 228 209 or 9% $ in millions 226 215 15.7% 16.1% 14.9% 206 14.6% • Operating income of $39.5M, up Adjusted
Slide 14: Strong Financial Position Supports Priority-Driven Long-Term Capital Allocation
Strong Financial Position Supports Priority-Driven Long-Term Capital Allocation In October 2022, executed 5-year, $800 M revolving credit facility, with flexibility to increase further for acquisitions; At end of Q3 2022, net debt leverage remained low, with ~$160 M of availability under prior credi
Slide 15: Positioned for Long-Term Growth
Positioned for Long-Term Growth With continued focus on organic growth and M&A, and margin performance above that of many of our peers, our financial framework aims to create long-term shareholder value Long-Term Organic Value-Added Revenue Growth Acquisitions (Couple of % points > GDP) High Single
Slide 16: Raising Mid-Point of 2022 Outlook
Raising Mid-Point of 2022 Outlook Raising mid-point of Adjusted EPS* and Sales Outlook • New adjusted EPS* outlook range of $1.91 to $2.00, updated from $1.85 to $2.00 • New sales outlook range of $1.41 B to $1.44 B, updated from $1.38 B to $1.45 B Key Assumptions ▪ Double-digit improvement in pre-t
Slide 17: Appendix
Appendix I. Segments Overview II. Eighty-Twenty Improvement Culture III. New Product Development IV. Non-GAAP Measures V. Executive Compensation VI. Investor Information 17
Slide 18: ESG Products
Appendix I: ESG Products | — if ee ; a Jetstream, Tare hw WESTECH a. fifSolutions {Depot Lb
Slide 19: ESG Products (continued)
Appendix I: ESG Products (continued) 19
Slide 20: ESG - Market Influencers & Where We Play
Appendix I: ESG - Market Influencers & Where We Play Market Dynamics ▪ Many ESG products support essential services that are 2021 Sales by Geography focused on cleaning ▪ COVID relief stimulus includes $350 B for state, local and territorial governments; package targets maintenance of 20% essential
Slide 21: SSG Products
Appendix I: SSG Products FEDERAL SIGNAL Safety and Security Systems Public Safety Systems FEDERAL SIGNAL Safety and Security Systems. Heavy Duty FEDERAL SIGNAL Safety and Security Systems Signaling FEDERAL SIGNAL Safety and Security Systems Systems |p FEDERAL SIGNAL VAMA Safety and Security Systems.
Slide 22: SSG - Market Influencers & Where We Play
Appendix I: SSG - Market Influencers & Where We Play Market Dynamics 2021 Sales by Geography ▪ Increased national focus on issues of public safety and law enforcement, and rising public expectations for transparency and accountability driving demand for 40% safety and security products 60% ▪ Rising
Slide 23: Eighty–Twenty Improvement ("ETI") Culture
Appendix II: Eighty–Twenty Improvement (“ETI”) Culture Manufacturing Efficiency Material Cost Reduction • Lean manufacturing focus • Waste reduction • Throughput flexibility • SKU rationalization • Labor pool management • Savings through volume aggregation • Flexible manufacturing model • Sourcing o
Slide 24: New Product Development
Appendix III: New Product Development • Several successful new product launches resulting from our customer-focused approach to innovation, including the award-winning launch of the ParaDIGm® vacuum excavator in 2016 • Targeting long-term organic revenue growth of a couple percentage points above GD
Slide 25: Non-GAAP Measures (Adjusted EPS)
Appendix IV: Non-GAAP Measures (Adjusted EPS) Adjusted net income and earnings per share (“EPS”) ($ in millions) Three Months Ended September 30, 2022 2021 The Company believes that modifying its 2022 and 2021 Net income, as reported $ 31.8 $ 29.2 net income and diluted EPS provides additional Add:
Slide 26: Non-GAAP Measures (Adjusted EBITDA)
Appendix IV: Non-GAAP Measures (Adjusted EBITDA) Adjusted EBITDA and adjusted EBITDA margin $ millions, except % Q3 2022 Q3 2021 The Company uses adjusted EBITDA and the ratio of Net income $ 31.8 $ 29.2 adjusted EBITDA to net sales (“adjusted EBITDA margin”), Add: as additional measures which are r
Slide 27: Non-GAAP Measures (Adjusted EBITDA cont.)
Appendix IV: Non-GAAP Measures (Adjusted EBITDA cont.) Adjusted EBITDA and adjusted EBITDA margin ($ in millions) 2017 2018 2019 2020 2021 Net Income $ 60.5 $ 93.7 $ 108.4 $ 96.1 $ 100.6 The Company uses adjusted EBITDA and adjusted EBITDA margin as Add (less): additional measures which are represen
Slide 28: Executive Compensation Aligned with Long-term Objectives
Appendix V: Executive Compensation Aligned with Long-term Objectives • The Company continues to focus on executing against a number of key long-term objectives, which include (i) creating disciplined growth, (ii) improving manufacturing efficiencies and costs; (iii) leveraging invested capital; and
Slide 29: Investor Information
Appendix VI: Investor Information Stock Ticker: NYSE:FSS Company website: federalsignal.com/investors HEADQUARTERS 1415 West 22nd Street, Suite 1100 Oak Brook, IL 60523 INVESTOR RELATIONS CONTACTS 630-954-2000 Ian Hudson SVP & Chief Financial Officer IHudson@federalsignal.com 29
Slide 30: Federal Signal - Moves. Cleans. Protects.
ff FEDERAL SIGNAL Moves. Cleans. Protects.
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